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Reporters Not Allowed into Gaza; Huge Job Losses Last Month; Obama Announces Nancy Killefer as Chief Performance Officer
Aired January 07, 2009 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Your money is now her job. This woman minutes away from becoming the government's newest watch dog. Her turf, how the government spends taxpayer money. President-elect Barack Obama is about to make the announcement. CNN senior White House correspondent Ed Henry is setting the stage for us. All right. So her name, Nancy Killefer. Boy, this is a big job, Ed.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right. Good morning, Heidi. Two democratic officials confirm that she will be named in the next half hour or so by the President-elect to a newly created post called Chief Performance Officer. The purpose, trying to bring some fiscal sanity back, scrub the federal budget.
This announcement coming, obviously, one day after the president-elect forecast that the annual deficit for the federal government is going to be $1 trillion. A really astounding figure, obviously.
She hails from McKenzie and company, the management consulting firm. And she also served as a Treasury Department official back in the Clinton days. So obviously has some government experience, some management experience that she brings to the table. But let's make no mistake. This is going to be a monumental task.
The president-elect is already talking about layering on top of that trillion-dollar deficit a $775 billion economic recovery plan with a very large tax cut. So he's been talking a lot about dessert. He has not been talking about spinach for the American people yet in terms of spending cuts, possible tax increases to get this budget back in balance, Heidi.
COLLINS: Yes. I mean, I just keep thinking about the responsibilities of one person, in a position like that. Is she going to have some sort of team underneath her working on all of this, I imagine?
HENRY: She will be one of many people, we should point out. I mean, obviously, the incoming Treasury Secretary Tim Geithner will have a say, a large say in fiscal policy. Larry Summers, who is going to be in charge of economic policy within the White House itself, will be involved.
And then of course, you have an incoming White House budget director that will really be putting the federal budget together. So this person will be working with that budget director to try to sort of scrub the budget. What happens oftentimes is the White House budget director deals with the budget year to year, has their plate full, if you will, so trying to bring in someone else to sort of help and take a step back, and say where could we cut some waste, where could we bring some more efficiency to government.
But you remember, this kind of thing has been done before. Vice President Al Gore more than a decade ago led the reinventing government initiative. They made some progress. But the federal government is a beast. And it's a growing beast, especially post 9/11. So this will be a monumental task, Heidi.
COLLINS: Wow, very interesting. All right. Ed, we're going to be following that and in just a few minutes, we'll have President-elect Obama's announcement of his chief performance officer. Should be having any minute now. Our Ed Henry is there, of course.
Roland Burris is back on Capitol Hill this hour. He is the man appointed by Illinois Governor Rod Blagojevich to fill the Illinois senate seat vacated by President-elect Barack Obama. Burris was turned away at the opening of the 111th Congress yesterday. You saw it live on our NEWSROOM program yesterday.
Today though he will make his case for the seat at a meeting with the Senate's top two democrats. CNN congressional correspondent Brianna Keilar is live on Capitol Hill. We're going to be talking with her in just a couple of minutes.
The new class on Capitol Hill. Well, it's time to get to work after a day of oath-taking and photo ops. CNN's Brian Todd looks at who is in and who is still trying to get there.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The Senate will be in order.
BRIAN TODD, CNN CORRESPONDENT: In one of his final official acts in office, Dick Cheney presides over the opening of the new senate.
UNIDENTIFIED MALE: Do you solemnly swear?
TODD: He swears in Joe Biden who will take his place in two weeks as vice president. They re-enact the moment with the official photographer, with no sign of hard feelings from campaign trail rhetoric, using a Bible that has been in the Biden family since 1893.
Joe Biden will hold his senate seat until he resigns to become vice president. Hillary Clinton and Ken Salazar also retain their senate posts until they become cabinet secretaries. We also see some new faces, including seven senate democrats who captured republican seats. But outside the chamber's pomp and ceremony, commotion in the corridors. Questions swirl over whether the Senate nominee from Illinois will be sworn in or not. Roland Burris is denied the chance to sign in because of the dispute over his appointment by embattled Illinois Governor Rod Blagojevich.
EMILY HEIL, ROLL CALL: Not a great start, and not the way senate democrats wanted to start the session. TODD: And there is a second empty senate seat from Minnesota where the recount is so close, it's headed for a court fight. On the house side, a more casual style than the senate.
UNIDENTIFIED FEMALE: Congratulations. You are now members of the 111th congress.
TODD: Pledges of bipartisanship and awareness of challenges ahead. And the burden of leadership for the democrats, now that they control the house, senate and the White House.
They're biggest challenge is to hang together, and pass Barack Obama's agenda. An agenda that starts with the giant economic stimulus plan that the president-elect hopes to sign, soon after taking office. Brian Todd, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Barack Obama's most pressing job may be to fix the economy. House Speaker Nancy Pelosi is joining the efforts to sell his stimulus plan. It's aimed at coaxing the economy out of a deep recession.
Right now, Pelosi is at the stimulus forum on Capitol Hill. So live pictures for you. She is calling on fellow democrats today to pass the measure by the middle of next month.
A pause in the fighting. Three hours every other day. Israel proposed the temporary truce to let humanitarian aid into Gaza. The first ceasefire took place just a few hours ago. What some are calling a first step. Diplomats in the region and at the United Nations are working on a lasting solution, though. Israelis say they welcome a plan in the works by Egypt and France. The Israeli military campaign is now in its 12th day. The United Nations reports at least 680 people in Gaza have been killed. Nearly a third of them women and children.
CNN's Paula Hancocks is monitoring development from the Israel-Gaza border. So Paula, what are you hearing now about the possibility of a more permanent truce? Paula, can you hear me OK?
PAULA HANCOCKS: Well, Heidi, that three-hour lull is just a distant memory now. We can hear heavy machine gunfire. We're hearing explosions in the distance in Gaza, and once again, as we have seen over the past 12 days, there is a layer of smoke hovering over Gaza. So certainly the lull is over. We've got some updated figures, as well from Palestinian medical sources saying that 680 Palestinians have died in the past 12 days.
And also, there's been well over 3,000 wounded. Now, according to the United Nations, they believe that some 30 percent of the casualty figures are women and children. And, of course, the casualty figures from yesterday, they believe about 45 percent of those were women and children. Of course, that after three Israeli landed near a U.N.-run school, which was actually being used to shelter hundreds of people in Gaza. Now, the Israeli military say that they were being fired upon, but the United Nations says that 99.9 percent sure that there were no Hamas militants inside the vicinity of the U.N.-run school. Certainly over the last three hours of that lull would have been a chance for 1.5 million residents inside Gaza to get some desperately-needed food and water. But certainly many of the bakeries have run out completely of food. Many of the shops aren't open, and aid agencies are saying three hours is simply not enough. If you can do three hours, then why not a 24-hour ceasefire. Heidi.
COLLINS: Yes, understood. A lot more work to be done obviously on this whole situation. Our Paula Hancocks there live along the border of Israel and Gaza. Thank you, Paula.
Diplomats in the region and at the United Nations are looking for a peaceful end to the fighting. Two hours from now, the security council is set to hold an open meeting and that means any delegate, not just the 15 council members can talk about what is happening in Gaza. And the various proposals on the table.
New position, new appointment. Just a few minutes from now, President-elect Obama tells us who he's calling on to bring fiscal order to government.
(COMMERCIAL BREAK)
COLLINS: A new round of weather headaches to deal with today. Rain in the southeast and a wintry mix in the northeast. Yesterday, heavy rain and flooding in northern Alabama forced officials to close streets. In the northwest, rain falling on top of heavy snow is raising the risk of flooding, avalanches and roof cave-ins.
And in New England, they're having to deal with a sloppy mix of snow, freezing rain and sleet. In fact, schools and colleges across Massachusetts closed for the day, or on delayed openings. Rob Marciano standing by now to let us know when it's all going to be nice and sunny again.
ROB MARCIANO, CNN, METEOROLOGIST: God, that delayed opening is just such a tease, you know?
COLLINS: You're right.
MARCIANO: You're a kid, you wake up, you're getting that snow day. Oh, two hours later, you know, big deal.
COLLINS: You're already up.
MARCIANO: Suppose it gets you out of the homework you didn't do the night before.
COLLINS: No.
MARCIANO: The northwest, we're going to take you there first, so those of you who are waking up with us, pineapple express here. Thank goodness it will be short-lived, but when it does come down, it's going to come down heavily. Heavy rain today, there will be some flooding. There already is some flooding in some of the rivers near Seattle, including the Tolt, the (inaudible) river, outside of Portland. You're going to see some flooding, as well.
And we've had a tremendous amount of snow, as you know, that we have been reporting in the past three weeks, unusually cold and snowy across the northwest. So avalanche danger, because we have rain on top of that, and with this, what we call pineapple express, the moisture is coming from the cells. So it's coming in a warm way, so snow levels are coming up. So we got some unstable snow layers there, and you've got the melting snow, as well.
So that is rushing down to the valleys. This is expected rainfall here over the next 48 hours. Those purples could see anywhere four, five or six inches of rain at the higher elevations. And here it is on the current radar scope. Most of the action north of Columbia zone, western Washington, Seattle, and there you go into the mountains, that's when our graphic really squeezes that moisture out of the clouds like a sponge.
31 in Chicago today, 39 degrees in New York. And it is really nasty there. Rain and snow in spots. So traffic delays, air travel, Philly to New York, La Guardia, San Francisco getting to it as well. But all of the major metropolitan airports out of New York City experiencing delays at this hour. Tomorrow looks to be a little bit better cold, but not frigid air to replace this system, and the winds will crank up across the northwest with this system as it comes in.
Looking ahead for a couple days, 38 degrees in Chicago. On Friday, 33 degrees in New York. So good news, Heidi, even though we are a bit of a mess, we are starting to see temperatures maybe even out a little bit, maybe seasonal across the board as opposed to having it whacked out on one end and not so whacked on the other.
COLLINS: Got it. We're not a mess. Yes. Very good.
MARCIANO: We're OK.
COLLINS: Rob, thank you.
MARCIANO: You got it.
COLLINS: Talk about a power lunch. Next hour, President Bush welcomes his successor to the White House. And then he'll sit down with the three living U.S. presidents. In fact, it's the first gathering like this in decades. CNN White House correspondent Elaine Quijano joining us now with more details. Hi there, Elaine.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Hello to you, Heidi. Officials here certainly buzzing ahead of that meeting. As you noted, the first such gathering of living presidents here at the White House since 1981. In just a couple hours, President Bush will host a lunch with President-elect Barack Obama, and also former President Bill Clinton, George H.W. Bush, and Jimmy Carter.
Now, Dana Perino, White House Press Secretary just wrapped up a briefing a short time ago, laying out how this is all going to work out. First there will be about a 20 or 30-minute meeting, one-on-one between President Bush and his successor, Barack Obama. And then there will be photographers and some reporters allowed into the Oval Office to get some pictures. And then there will be the private luncheon slated to last an hour, we are told, in the private dining room off the Oval Office.
Don't know yet what they're going to be eating, but they'll get to choose, we understand, from several menu items. Now, as for the conversation itself, whether or not it will focus on policy or more personal, Dana Perino indicating it will likely be a mix of both, undoubtedly, with the meeting coming against the back drop of the situation in the Middle East, and the U.S. economy, the ailing U.S. economy, and the situation it is in.
Those topics will likely come up, as well. Dana Perino also noting, though, that despite ideological differences among these leaders, they are all essentially rooting for the same team. Here's what she said a short time ago.
(BEGIN VIDEO CLIP)
DANA PERINO, WHITE HOUSE PRESS SECRETARY: Although they may disagree on some policy prescriptions in order to solve problems in America, they're obviously all rooting for the same team. And they will have a chance today to have a rare opportunity of being together in one room to share ideas and viewpoints, war stories and experiences here at the White House.
(END VIDEO CLIP)
QUIJANO: Now, we should note that George H.W. Bush, or Bush 41, as he is known here around the White House spent the night here last night, and a short time ago was meeting with the incoming vice president, Vice President-elect Joe Biden. No word yet on what they discussed specifically, but all in all, this place certainly looking a lot more busy as we get closer to when the luncheon is set to take place.
COLLINS: Very interesting. All right. Elaine Quijano, we sure do appreciate that. Thank you.
Presidential politics anger fades, history forgives. Look at this, the proof in the numbers, according to a new national poll. According to the CNN opinion research corporation survey, former president Jimmy Carter has seen his approval rating more than double since voters ousted him after one term.
And George Herbert Walker Bush, the father of the current office holder, you just heard Elaine talking about 41 has also seen his popularity grow in retirement. His approval rating now, 60 percent. That compared to 34 percent just before the election.
Former President Clinton enjoys the 69 percent approval rating now compared to 66 percent when he finished his second term.
Quickly now, want to get to our own Brianna Keilar to talk a little bit more about what is happening there on Capitol Hill, because it's kind of like a take two, round two, if you will, Brianna, for Roland Burris as we are looking at some of these new video right now, him arriving on Capitol Hill, sort of stating his case once again today.
VOICE OF BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: It's not quite what we saw yesterday.
COLLINS: Yes.
KEILAR: Burris did go in the side entrance - or sort of an office building entrance to Capitol Hill for this meeting that he's having with two top democrats in the senate. The big question is, what is going to be discussed in this meeting? What we're hearing from both sides is they're interested in listening to the other side.
There is no one saying that they're expecting a break through. And they're being pretty vague with what the expectations are in general. But democratic leaders who want to block Roland Burris from taking Barack Obama's senate seat are facing is just really some mounting pressure to abandon their efforts. You know, their major effort, Heidi, is hinged around trying to deny the seat based on the fact that there is no signature from the secretary of state of Illinois.
COLLINS: Right.
KEILAR: Well, that man Jesse White, telling WGN radio in Chicago today that he really feels like the fall guy. That the senate could seat Burris without his signature. The signature is really more ceremonial than it is a point of law. And then if that - we had heard before from democratic sources was that strategy didn't work out, there was going to be this effort to kind of refer this to the rules committee, have an investigation, and just further delay the seating of Burris until Illinois Governor Rod Blagojevich could be ousted and his successor could appoint someone else.
Well, we're now hearing as of last night from Diane Feinstein who is the outgoing chairwoman of the rules committee that she doesn't agree with democratic leaders on this. And furthermore, Heidi, there's the whole race issue, which does appear to be growing, because Roland Burris, if seated, would be the only African-American senator.
We heard yesterday from Congressman Bobby Rush of Illinois saying that this action, this blocking Burris from the seat is racist. And we also heard from Congressman Jesse Jackson Jr. who had actually voiced that he wanted this seat himself, and he's saying that the racialization of this issue is going to make it more difficult for democrats to hang on to the seat in 2010. So you can see on all kinds of fronts, including the NAACP saying they're standing behind Burris.
So many different fronts the democratic leaders are up against here, even though according to a spokesman for Harry Reid, he said he's not feeling the pressure. We'll see, Heidi.
COLLINS: Yes, we will see. All right. A lot more on this story yet again today. Brianna Keilar, thanks so much for that.
Taking the good with the bad. The largest study of its kind looks at a promising treatment for Parkinson's disease.
(COMMERCIAL BREAK)
COLLINS: Nearly 1.5 million Americans suffer from Parkinson's disease with 60,000 new cases diagnosed every year. And with no cure in sight, there is a new study that may help patients with the advanced form of the disease. CNN medical correspondent Judy Fortin is here with us now.
So Judy we're talking about treating these patients with something called deep brain stimulation. A lot of people don't know what that is. What's it all about?
JUDY FORTIN, CNN MEDICAL CORRESPONDENT: Well, it's actually been around for years. Deep brain stimulation has been used to address symptoms of Parkinson's disease since the late 1990s, but this is the first large study that compares this form of treatment to the best medical therapy.
The study found that deep brain stimulation vastly improved motor function for patients. Almost twice as long as for patients who took medication. So here's what it said. Those who were on standard medications for Parkinson's had no additional improvement or function. But with deep brain stimulation, patients saw nearly five hours of additional daily improvement or function.
Now, here's what we're talking about when we say motor function. We're talking about how well patient moves, or walks, performs tasks like bathing or taking care of themselves, the very basic things that we go through every day.
And here is what is so exciting about the study. Deep brain stimulation was also effective for older patients. Those 70 and above who are generally excluded from these types of studies because they may have other conditions as well. But I got to tell you, Heidi, there are some risks. About 40 percent of the patients had to be hospitalized during the study for things like infection.
One person died during the study and the Parkinson's Disease Foundation has cautioned patients that although the study confirms benefits or there for patients who go through deep brain stimulation, that the patients and the doctors need to carefully weigh the benefits and the risks before undergoing any kind of brain surgery.
COLLINS: Well, yes. I think always a good idea to do something like that. But you have to wonder, how exactly does this type of stimulation really work on the brain?
FORTIN: Well, it's fascinating. The patient is actually awake during the procedure. A neurosurgeon places probes deep into the parts of the brain responsible for motor function. So in a Parkinson's patient, that part of the brain is damaged, and it sends bad messages, which translates to tremors, movement problems, the hallmarks of the disease.
And what deep brain stimulation does is prevent those bad signals from getting through. The electrodes actually send out tiny pulses of electrical stimulation to reroute the bad signal so the body is not getting those messages anymore. So it's kind of cool, daring do stuff but it works for a lot of these people.
COLLINS: Yes, but not for everybody. Not everybody is a good candidate for this.
FORTIN: It's the caveat. That's right and I think it's really important to point that out, that it's not right for everyone. Deep brain stimulation works best for those people who don't respond to Parkinson's medications or have seen the effectiveness of the drugs diminish over time.
So people with moderate to advanced Parkinson's symptoms, not responding to their medications are said to be the best candidates. However, if you're listening to this story, and you're saying, wait a minute, I'm on medications and they're working, stay on those meds.
Talk to your doctor though. But you do want to know that deep brain stimulation provides about 11 hours a day of good functioning, and if patients don't have the advanced form and their meds are still working, they'll still get that good functioning, but it will be less time. That's all.
COLLINS: Absolutely. Well, it is fascinating, that's for sure. So we'll keep our eye on that one.
FORTIN: All right.
COLLINS: Judy, thanks so much.
FORTIN: You're welcome.
COLLINS: Speaking of neurosurgeons, "Paging Dr. Gupta." The Obama White House is on hold. Sources inside the transition confirm they have approached CNN's chief medical correspondent about the U.S. surgeon general's post. The Obama team is said to be impressed with the neurosurgeon's communication skills and his past government experience, as well.
Gupta has served as a White House fellow, and a special advisor to then first-lady Hillary Clinton. We'll stay on top of that story for you, too.
A pause in the fighting now for at least a few hours. Could it lead to a permanent one? Another view of the fighting from the border.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: A temporary humanitarian truce. The Israeli military halts the military operations in Gaza for three hours today. Our reporters at the scene say fierce fighting has resumed since that lull ended about an hour and a half ago. Israeli military officials say the three-hour ceasefire is to allow in humanitarian aid and supplies. And they say it will happen every other day. Palestinian medical sources say more than 680 people have died in Gaza since the campaign began 12 days ago. Those same sources say another 3,000 people have been hurt.
The Israeli military says seven Israeli soldiers and three civilians have been killed.
Long distance coverage. Israel is preventing the media from getting close-ups of the fighting in Gaza. CNN's Anderson Cooper reports.
(BEGIN VIDEOTAPE)
ANDERSON COOPER, CNN HOST (voice-over): On a hilltop overlooking Gaza, dozens of journalists gather each day, training their lenses on a battle they can barely see.
COOPER (on-camera): It's a strange sight to see so many reporters and camera people all clustered together in this one tiny hill watching a battle that's being waged miles away. It's not how most of us would like to cover this story, but the Israeli government won't allow international reporters to go into Gaza, so this is as close as most of us can get.
How frustrating is it trying to cover the story from so far away?
NIC ROBERTSON, SR. INTERNATIONAL CORRESPONDENT: It's really frustrating, because you don't know what's going on. You can't see there, or be there and feel it. And you can't see.
We get these pictures from the hospital, but what's happening on the back streets behind the hospital? What's hamas doing?
You know, the sort of questions that we would ask that go beyond the immediacy of the civilian casualties that you won't know about. But the other stuff that really informs you.
COOPER (voice-over): Even access to Israeli soldiers has been cut off. In 2006, in the fight against hezbollah, reporters were allowed to broadcast from Israeli artillery positions.
For these soldiers the real concern -- I even embedded with an Israeli army unit on a mission into southern Lebanon. This time around, however, Israel is not permitting any access like that.
UNIDENTIFIED MALE: There was too much exposure. And it had an effect on our ability to achieve strategic goals. So that's one of the lessons we learned from the war in lebanon.
COOPER (on-camera): So you're saying you're preventing reporters from being embedded from being that close because it's in part interfering with military operations.
UNIDENTIFIED MALE: Absolutely. Absolutely. COOPER (voice-over): Israeli officials are also acutely aware they're fighting not just a military campaign, but a public relations battle. Limiting access is a way to alter how the war is reported.
ROBERTSON: The officials we talk to say it's security and it's for our safety.
But it creates an impression that they don't want to -- the suffering that's happening in the gaza strip right now to be witnessed by the world.
But it is. And right now, you could make a real case that the message that's coming out is one that's essentially controlled by people that are perhaps more partisan to the situation inside the gaza strip than a lot of international journalists.
COOPER: Inside gaza, press control by hamas is heavy-handed. There are few press freedoms inside gaza, and hamas controls who reports from there and where they can go.
While pictures of wounded children being brought to the hospital are clearly encouraged, we rarely see images of that hamas fighters or their rockets being fired into Israel. In trying to shape public opinion, both sides know the importance of pictures, and both sides want to shape the story those pictures reveal.
(END VIDEOTAPE)
COLLINS: And as Anderson reports, the public relations battle continues along with the military one.
A natural gas dispute between Russia and Ukraine could cause heating problems across Europe today. The flow of gas is now just a trickle.
The European union gets about a quarter of its natural gas from Russia. Most of it from pipelines running through Ukraine.
Today Russian Prime Minister Vladimir Putin ordered a halt to those gas shipments, claiming Ukraine is stealing gas from the pipelines. Russian energy giant Gazprom cut off Ukraine's supply in a dispute over back payments earlier this month.
It could be months before Minnesota has a second senator in Washington. Republican incumbent Norm Coleman has filed a lawsuit over recounts.
Earlier this morning, I talked to Minnesota's secretary of state, Mark Ritchie about that recount, and Republican govnernor Tim Pawlenty saying he will not certify the election until all legal challenges are over.
(BEGIN VIDEO CLIP)
MARK RITCHIE, MINNESOTA SEC. OF STATE: It's really not a decision of his or mine. This is the law of the state of Minnesota. It's very precise in this matter. I think the recount was the most accurate humanly possible. And the purpose of the recount is to really determine how the Minnesotans voted.
But a contest is often to make sure that the losing candidate really does feel at peace in it their heart that they did their best, but they came up short.
And so this is a very important part of our entire process here in Minnesota.
(END VIDEO CLIP)
COLLINS: The state canvassing board named challenger Al Franken the winner by just 225 votes. Norm Coleman's attorney says he wouldn't be surprised if the trial lasts several months.
Considering impeachment for Rod Blagojevich. An Illinois house panel gets back to work today. Now, considering the case against the governor, they could rule later this week.
But first they want to talk with Roland Burris, Blagojevich's choice to fill Barack Obama's Senate seat. They are also waiting to hear if they'll have access to some of the federal wiretaps. A quick decision could lead to a full house vote of impeachment by this weekend. .
New position, new appointment. Just minutes from now, President-elect Obama tells us who he's calling on to bring fiscal order to government.
(COMMERCIAL BREAK)
COLLINS: Quickly want to let you know we are awaiting President-elect Barack Obama. We have been telling you all morning long that he will be naming his chief performance officer.
What's that? Well, it's a new position. And we understand it will be a person who will be bringing fiscal order to Washington. Quite a large job.
We also understand there will be a team of people underneath the person whose name we believe to be Nancy Killefer. So we're going to be bringing that to you just as soon as he comes to the podium.
It is a new year, but Wall Street and hundreds of thousands of Americans are still dealing with the same old problems. Jobs are being slashed, salaries are being frozen, and many companies aren't even hiring at all.
Susan Lisovicz is at the New York Stock Exchange now with the numbers.
It looks like the Dow down there about 180 points too, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: That's right, because the news isn't good, Heidi. But you know, having said that, policy makers at the Federal Reserve, many economists say the situation is going to get worse before it gets better. So there is your caveat.
OK. Now let's tell you about the payroll firm, ADP, and what it had had to say about job cuts in the private sector in December. Nearly 700,000 jobs cut, just in one month. That from ADP.
The biggest losses, the service sector, which is the broadest part of the economy. That can include everything from say restaurants to retail.
Also manufacturing. Manufacturing has been hard-hit. Small and medium size businesses have been harder hit than big companies. It's just harder for them to absorb the losses, and losses are what we're seeing in a little more than one hour of trading on Wall Street.
The Dow Industrials down 170 points, or nearly two percent. The Nasdaq and the broader S&P 500 each down about two percent. And this is important, Heidi, not only because of the number, which is eye- popping, but we get the government's monthly jobs report on Friday. That is more inclusive, and that is something closely scrutinized here on the Street.
COLLINS: Absolutely. In fact, is this what we should expect from the government's report, nearly 700,000 job cuts?
LISOVICZ: No, but it would continue the declines that we saw all of 2008. The estimate is for 475,000 job cuts in December, and that the unemployment rate would rise to seven percent.
Why the discrepancy? It's a big one. Well, ADP doesn't count government jobs, but believe it or not, government actually has been a bright spot. It has been adding jobs.
But overall numbers for 2009 are likely to worsen the Congressional Budget Office just revised today, this morning, its outlook, and it's forecasting the unemployment rate to rise to nine percent by early next year.
Quickly, we're seeing January job cuts. Alcoa is cutting 13,500 jobs or 13 percent of its work force. It's freezing its hiring and salaries, as well.
And furniture retailer, Ethan Allen is cutting 350 jobs. Again, the situation likely to get worse before it gets better. And that's what we're hearing. And we're -- we're in the throes of recession right now, Heidi. And it's ugly.
COLLINS: Yes. Yes. All right, well, we're watching closely. Thanks so much, Susan. Appreciate that.
Meanwhile, we are also watching this closely. President-elect Barack Obama's announcement on his choice for a chief performance officer. That is a newly-created position to oversee government spending.
Want to go ahead and take a moment now to bring in senior White House correspondent Ed Henry.
Ed, I know this announcement is just possibly seconds away, as they're getting ready at the podium there.
ED HENRY, SR. WHITE HOUSE CORRESPONDENT: That's right, Heidi. Nancy Killefer will be the person getting the job. You'll see her in just a moment coming out with the president-elect.
This is all about trying to bring some efficiency to the federal government, trying to scrub the federal budget, find ways to save money, cut out ways waste, et cetera.
There have been many efforts like this before, but obviously the urgency has been added because of the fact that the president-elect yesterday declared that for the first time the federal government is now going to forecast an annual budget deficit of $1 trillion, a truly astronomical figure.
And he at the same time, though, is talking about an economic recovery plan in the neighborhood of $775 billion on top of that. He has been talking about health care reform, as well. That will cost money. And he has not really laid out a lot of spending cuts, frankly.
He has also talked about tax cuts that can add even more to that. So -- here he is.
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: That's fine, please sit down.
Good morning. By now we know we are facing a crisis in our economy, one that requires immediate and decisive action to spur the creation of new jobs as we lay the foundation of future growth.
And with the American recovery and reinvestment plan that Congress will soon be debating, we intend to deliver that change.
But during the course of this campaign, during the course of the last two years, I committed to more change than that. We committed to changing the way our government in Washington does business. So that we're no longer squandering billions of tax dollars on programs that have outlived their usefulness or exist solely because of the power of a lobbyist or an interest group.
We can no longer afford to sustain the old ways, when we know there are new and more efficient ways of getting the job done. Even in good times, Washington can't afford to continue these bad practices. In bad times, it's absolutely imperative that Washington stop them and restore confidence that our government is on the side of taxpayers and everyday Americans.
Just today, the Congressional Budget Office announced that the deficit we are inheriting from this budget year will be $1.2 trillion. And we know that our recovery and reinvestment plan will necessarily add more. My own economic and budget team projects that unless we take decisive action, even after our economy pulls out of its slide, trillion-dollar deficits will be a reality for years to come.
As I said yesterday, our problem is not just a deficit of dollars, it's a deficit of accountability, and a deficit of trust. So change and reform can't just be election-year slogans. They must become fundamental principles of government. And that's why the appointment I'm announcing today is among the most important that I will make.
During the campaign, I said that we must scour this budget. Line by line, eliminating what we don't need or what doesn't work, and improving the things that do.
As the first chief performance officer working with Peter Orszag and Rob Nabor at the Officer of Management and Budget, Nancy Killefer is uniquely qualified to lead that effort. For nearly 30 years, as a leader of McKenzie & Company and as assistant secretary for management, chief financial officer and chief operating officer at Treasury under President Clinton, nancy has built a career out of making major American corporations and public institutions more effective, more efficient, and more transparent.
Nancy is an expert in streamlining processes, and wringing out inefficiencies so that taxpayers and consumers get more for their money. And during her time at Treasury, she helped bring the department into the 21st century, modernizing the IRS, and preparing systems for Y2K.
But Nancy also understands that at the end of the day, government services are delivered by people. That's why she's always worked tirelessly to empower employees to take matters into their own hands, to rethink outmoded ways of doing things, to embrace new systems and technologies, and to take initiative in developing better practices.
When Nancy was offered her first position at Treasury, she responded, and I quote, "...if you are willing to embrace significant change, then you're looking at the right person. But if you just want to keep the trains running on time, don't ask me to do this job."
When I heard that, I knew I had chosen exactly the right person for the challenges we face. And I will be instructing members of my cabinet and key members of their staffs to meet with Nancy soon after we take office. And on a regular basis thereafter, to discuss how they can run their agencies with greater efficiency, transparency and accountability.
I will also see to it that we apply these principles of budget reform to the economic recovery and reinvestment plan. This plan will call for dramatic investments to revive our flag in the economy. Save or create three million jobs, mostly in the private sector. And lay a solid foundation for future growth.
In order to make these investments that we need, we'll have to cut the spending that we don't. And I'll be relying on Nancy to help guide that process. In the end, though, meeting the challenges of rebuilding our economy and bringing a new sense of responsibility to Washington isn't just about rearranging numbers on a balance sheet. It's about rewarding people's trust and restoring that trust in their leadership. Beccause in order to restore confidence in our economy, we must restore the American people's confidence in their government, that it's on their side, spending their money wisely, to meet their family's needs. I'm confidence that with Nancy's leadership and the efforts of leaders on both sides of the aisle, we will do just that. And with that, let me give Nancy an opportunity to speak.
NANCY KILLEFER, OBAMA'S CHOICE FOR CHIEF PERFORMANCE OFFICER: Thank you, Mr. President-elect. I'm deeply honored to be selected as the nation's first chief performance officer, and will do my best to create a government that works better for its citizens.
Most of the operational issues that the government faces today have developed over decades, and will take time to address. But there is an urgency to begin now.
I know from my experience bringing about change in the private and public sectors that government has the capacity to deliver services more efficiently and effectively. I have seen it done.
And I have seen it important to work across bureaucratic boundaries. By that I mean to get different parts of government working together to deliver services that consumers, its citizens, deserves.
The people who deliver those services, the government employees themselves, will be central to this effort. I am convinced that the success of every policy of this administration will be influenced by the people executing it. And I am committed to engaging and drawing on the talents of the federal work force in order to deliver on our promise of a new, more efficient and effective government.
Thank you.
OBAMA: All right. With that, let me take a couple of questions. We'll start with Laura Meklynn (ph), Wall Street Journal.
There you are. How are you?
LAURA MEKLYNN, REPORTER, WALL STREET JOURNAL: Mr. President-elect, budget experts agree that the real key to controlling spending lies with the entitlement program.
How early do you plan on addressing Medicare and Social Security, and what will your approach be?
OBAMA: Well, first of all, as I noted in my remarks, we're going to be inheriting a trillion-plus dollar deficit. And if we do nothing, then we will continue to see red ink as far as the eye can see.
And at the same time, we have an economic situation that is dire. And we're going to have to jump start this economy with my economic recovery plan, creating three million jobs. That's going to cost some money.
And in the short-term, we will actually see potentially additions to the deficit. As you point out, the key is going to be medium-term and long-term, how do we bend the curve so that we start getting these deficits down to a manageable level? And entitlements are going to be a part of that. We will -- we are working currently on our budget plans. We are beginning consultations with members of Congress around how we expect to approach the deficit. We expect that discussion around entitlements will be a part, a central part, of those plans.
And I would expect that by February, in line with the announcement of at least a rough budget outline, that we will have more to say about how we're going to approach entitlement spending, how we're going to approach eliminating waste in government, one of Nancy's tasks. So we will have some very specific outlines in terms of how it's going to be done.
Chuck Todd.
CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT: Thank you, Mr. President-elect. The situation in Gaza is getting worse. Fighting has resumed (INAUDIBLE) this morning. I understand your response has been, one president at a time. You can't say anything that is not the way you have handled the economic situation.
And with it getting worse, is it important for you to send a message to the Arab world right now that you are involved in the cease-fire talks, that your national security team is working with the Bush administration national security team, rather than just getting updates?
OBAMA: Yes, look. I will repeat what I've said before. We can't have two administrations running foreign policy at the same time. We simply can't do it. And so, as a consequence, what I am doing is I am being briefed consistently. My national security team is fully up to speed on it.
But the situation of domestic policymaking and foreign policymaking are two different things. We cannot be sending a message to the world that there are two different administrations conducting foreign policy. That is not safe for the American people.
Obviously, I am deeply concerned about the status of what's going to be taking place, what's been taking place in Gaza. And as I said yesterday, I am doing everything that we have to do to make sure that the day that I take office, we are prepared to engage immediately in trying to deal with the situation there.
And not only the short-term situation, but building a process whereby we can achieve a more lasting peace in the region. But until I take office, it would be imprudent of me to start sending out signals that somehow we are running foreign policy when I am not legally authorized to do so.
TODD: Do you think the Palestinians, though, are interpreting your silence in a certain way?
OBAMA: Chuck, the -- there are -- I can't control how people interpret what I'm saying, other than to repeat what I've said, and hope that they hear what I'm -- hear my message.
The silence is not as a consequence of a lack of concern. In fact, it's not silence. I've explained very clearly exactly what institutional constraints I'm under when it comes to this issue. OK?
Jake.
JAKE TAPPER, ABC NEWS SENIOR WHITE HOUSE CORRESPONDENT: Thank you, Mr. President-elect. Welcome to Washington.
OBAMA: Oh, it's great to be here.
TAPPER: Your team has talked about the stimulus package being $675 to $775 billion. But at the same time, you have distributed a memo -- you're going to distribute a memo in which economists say it should be between $8 billion -- I'm sorry, $800 billion and $1.3 trillion. How do you reconcile that difference, and also, could you explain what you consider to be truly stimulative, when any project will create jobs in the short term?
OBAMA: Well, we are still in consultation with members of Congress about the final size of the package. We expect that it will be on the high end of our estimates, but will not be as high as some economists have recommended because of the constraints and concerns we have about the existing deficit.
In terms of the components of the package, as I've made clear over last several days, we're going to have a investment component designed to create or save 3 million new jobs. Part of what the charge of my team has been is to figure out how can we make sure that even as we're creating short-term jobs and spurring demand in the economy, that we're also laying the groundwork for long-term economic growth, which is why a lot of the stimulative -- a lot of the investments are going to be around things like energy, health care, education, things that we need to be doing anyway.
Part of the stimulus package will be to provide tax relief to middle- income families, and where it makes sense and is going to work, to provide some tax relief to businesses to spur on investment in the private sector. And part of the package is going to be to help states who are under extraordinary budget pressures, to prevent them from laying off more workers in vital service areas like teaching, law enforcement, and so forth, so that not only are we saving jobs, we're also making sure that states are able to provide basic services to their citizens at a time of critical need.
In terms of what I consider appropriate stimulus, you know, the criteria that we've tried to lay out is, are we able to use this money wisely, effectively, in a two-year time span so that we're not creating long-term obligations that would add to the structural deficit that exists, but would provide an immediate boost to the economy.
And as I indicated yesterday, one of the things that I think is important is that we do not have earmarks in this package. I've said before, I think it's entirely appropriate for members of Congress to want to have some say in terms of projects that take place in their district. Many of the projects that they might advocate for are worthy. But this isn't the place to do it. And so I think it's important for us not to have earmarks here. It's important for us to have transparency in how the money is spent. I intend to make sure that we have unprecedented measures to ensure that taxpayers can keep track of how this money is spent.
So if, you know, we can get this done quickly, then I have confidence that not only are we going to be able to create jobs, but we're also going to be making a down payment on some critical areas that, as the economy recovers and the private sector starts investing again, we're going to see some long-term benefits and long-term savings.
And I'll just take one example. Part of our stimulus package is going to involve revamping all federal buildings so that they're energy- efficient. If we do that effectively, then over the long term, we are going to save billions of dollars in energy costs for the federal government and for taxpayers. That's the kind of charge that Nancy is going to have, is identifying where are areas where we can make big change that lasts beyond the economic recovery plan and we'll save taxpayer money over the long term.
OK? Thank you, everybody.
QUESTION: Sir, what about Roland Burris? Would you like to see him seated in your seat, Roland Burirs?
OBAMA: That is a Senate matter, but I know Roland Burris. Obviously, he is from my home state. I think he's a fine public servant. If he gets seated then I'm going to work with Roland Burris just like I work with all of the other senators, to make sure that the people of Illinois and the people of the country are served.
All right? thank you, guys.
COLLINS: Well, there was a quick question at the very end there about Roland Burris for President-elect Barack Obama, who has just now named his chief performance officer. It's the first time that position has been named. We want to get to our national political correspondent, Jessica Yellin, now with a little bit more on that.
And he is definitely jumping in on the economy. Can't really wait until January 20th.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: That's right, Heidi. For Barack Obama, the message is all about economic recovery. He feels like this is the one issue that he can drive forward while President Bush is still in office. And you hear all these other issues erupting around him, Roland Burris, also the situation in Gaza.
He consistently refuses to weigh in with any sort of decisive position on these other issues, because he wants the entire focus right now to be steamrolling toward this stimulus package. And it's a bit of a struggle for him right now, with all of these other events breaking. But for Obama, the message is this combination of a fiscal discipline with this huge spending bill that is going to be a little bit of a difficult sell in some ways. And we're seeing the Democratic Party trying to come together and convince Americans that they need to spend this much money right now to stimulate the economy, and it's what Barack Obama is trying to do day in and day out with the drumbeat of focus, even tomorrow with a speech on the economy. He called it dire, our situation.
COLLINS: Right.
YELLIN: I don't think we've heard him say that before, clearly setting expectations low.
COLLINS: All right. Well, we sure do appreciate that. We continue to watch all of this today very closely. Our Jessica Yellin, thanks so much. Going to head it over now to Tony Harris with more.
